What is return on capital employed (ROCE)? Back to list

Member SinceJul 08, 2021

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Kihn

Nov 08, 2022 a 08:55
ROCE, or return on capital employed, is a long-term profitability ratio that measures how efficiently a company uses its capital. The metric indicates the profit generated by each dollar (or other unit of currency) used.
ROCE is calculated by dividing earnings before interest and taxes (EBIT) by capital employed. In a ROCE calculation, capital employed refers to the total assets of the company after all liabilities have been deducted.

When calculating ROCE, use the following formula:

ROSE: operating earnings/capital employed

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